He gained a reputation as the proudly uninhibited billionaire mining boss behind Mineral Resources’ meteoric rise, but it would be what Chris Ellison kept hidden that would be his downfall.
“I really like the whole concept of being able to speak the truth and say it the way it is,” he told The West Australian newspaper in mid-September, weeks after publicly declaring it the “shittiest time” to be a managing director.
Chris Ellison will have to face MinRes shareholders on November 21.Credit: Trevor Collens
At the time, the New Zealander pinned his woes on the depressed lithium prices that had sparked sweeping cost cuts and would later force MinRes to shutter its Bald Hill mine.
But behind the scenes, Ellison was bracing for the outcome of a top-secret board-ordered probe into a tax evasion scheme that would cost him the top job at the company he had spent more than 30 years building.
By October 18, the machinations of the scheme involving Ellison and the $3.9 million deal he struck with the Australian Tax Office was plastered across the Australian Financial Review.
Ellison and four other MinRes executives had profited to the tune of millions of dollars by using offshore companies to peddle a markup scheme from 2003 until 2009 which involved acquiring mining equipment and parts to import and on-sell in Australia.
Initially, the board confirmed it was investigating but declared it intended to stand by Ellison and had full confidence in his leadership. MinRes chair James McClements branded the issue a “private tax matter”.
But the board of the diversified mining services company soon changed tack and went into damage control amid a plunging share price, divided investors and news the rapidly evolving scandal had piqued the interest of the corporate regulator.
It was not until October 29 that the board confessed to the market it had known about the scheme since Ellison came clean more than two years and had even recruited external lawyers to investigate.
Forty-eight hours later, it was flogging off its gas assets to Australia’s richest person Gina Rinehart for $1.1 billion in a bid to improve its debt-laden balance sheet.
The marginal share price rebound and lull in the barrage of bad publicity was short-lived.
By November 4, a downcast Ellison — who had just returned from several weeks holidaying overseas — was driving into the Osborne Park-headquartered complex to publicly announce he would vacate the role in the next 18 months.
And he would be forced to repay almost $3.8 million in funds owed, forfeit bonuses tipped to be worth $9.6 million and make charitable donations totalling $5 million over the coming years.
The bombshell probe had concluded Ellison used company resources for personal gain, from rent paid to entities in which he had an interest, staff directed to work on his personal property — including his boat — and relief afforded to entities tied to his daughter Kristy-Lee Craker.
However, the board insisted it was satisfied that the use of the company assets had not been financially detrimental.
Emails related to East Far Equipment Holdings — the company at the centre of the scheme — had been wiped in 2019.
Two further payments were made by MinRes after the $7 billion diversified mining services company’s initial public offering in 2006 to extinguish its liability, but the revenue generated by the entities went undisclosed until Ellison’s voluntary disclosure in 2021.
The Perth-based billionaire settled his debts with the ATO in May 2023, something the board remained in the dark about until six months later.
McClements revealed he would also call time on his 10-year career with the company while conceding the company’s rapid growth had placed pressure on its governance systems.
Despite Ellison previously downplaying their dealings and gloating about his family-friendly company employing “next gens”, the board conceded it should have disclosed the rent relief afforded to Ship Agency Services and Propel Marine, both of which are linked to Cracker.
But the board said it failed to do so because it did not believe the deal was materially price sensitive.
In response to queries from the ASX, the miner said it tore up the 11-year rent relief arrangement after the related-party deal was uncovered last financial year and was back paid $158,000.
Then came the shock revelations the miner forked out $45 million to buy a 49 per cer cent stake in an industrial park tied to Ellison and his wife Tia.
Ellison has maintained a low profile since the scandal was thrust into the public arena — until now.
The billionaire is set to front shareholders for the first time since the scheme was made public on Thursday, when the company holds its annual general meeting at its namesake park in Perth’s inner-east.
The meeting is being broadcast live, but the media have been relegated to a separate room as the company scrambles to accommodate investors it anticipates will attend in droves to grill the board.
In the month since the scandal erupted, the plummeting share price has wiped billions of dollars off the company’s value, it has become the subject of a formal ASIC investigation, and it has been condemned by investors.
The second-largest shareholder behind Ellison, who holds an 11.5 per cent stake in the company, is eager for him to stay and isn’t alone, while others believe his position is untenable and are demanding answers.
The board has remained mum on whether Ellison — who remains MinRes’ largest shareholder with an 11.5 per cent stake — will retain another position at the miner once his replacement is found, or who may be waiting in the wings.
In carefully curated market statements, Ellison has been uncharacteristically apologetic, expressed “deep regret” and vowed to do all he can to regain the confidence of investors and his team.
But how the straight-talking mining boss will handle the fallout when he steps up to the lectern is anyone’s guess.
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.